2.3m daily crude oil production is achievable

Group Managing Director of NNPC, Dr. Maikanti Baru

The Nigerian National Petroleum Corporation (NNPC) has said the federal government’s 2.3 million barrels per day (bpd) crude oil projection for the 2018 budget is achievable.

The NNPC Group General Manager, Corporate Planning and Strategy, Mr Bala Wunti, said in Abuja that the projection is realistic.

A statememt by Mr Ndu Ughamadu Group General Manager Public Affairs Division of the corporation, quoted Wunti that 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper placed the current production capacity for the country at more than 2.3 million barrels per day.

He noted, however, that due to the insecurity in the Niger Delta region, the full production capacity had not been achieved over the years.

”The 2018 crude oil national production projection for Joint Ventures, Modified Carry Arrangement or External Financing, Production Sharing Contracts, Independents, Marginal Fields and Service Contracts is about 2,298,000 barrels per day.

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”The 2018 price projection on the long term price assumption was based on price scenarios of $35 (low), $45 (medium) and $55 (high).

“Most price forecasting agencies thought that the medium price scenario had the highest probability of occurrence which the 2018 budget was hinged upon.

“Consequently, a conservative price projection of $45 per barrel was used as benchmark for crude price for 2018 budget,” Wunti said.

Speaking on the 2017 performance of crude oil production from January to October, Wunti said the average performance stood at 1,885,000 bpd which is equivalent to about 86 per cent of the budgeted 2.2 million bpd.

Wunti noted that the average crude oil price performance between January and October 2017 was $52.49 bpd, an equivalent of 18 per cent over performance of budget price benchmark of $44.50 bpd.

The Chief Strategist of the NNPC said the 18 per cent above budget benchmark was due to stability in the crude oil market and various geopolitical dynamics around the world.

He observed that the outlook was reassuring given the positive global economic growth and the improved compliance with the Organization of the Petroleum Exporting Countries’ production cut, adding that the incident of oversupply remains an issue.